- The graphite supply chain is geographically concentrated with nearly 65% of output currently produced in China
- The U.S. pursued to promote further investment and geographical diversification within the sector, with credits granted to electric vehicles produced with critical minerals that are not supplied by ‘foreign entities of concern’
- Reflex Advanced Materials are working towards demonstrating the positive economics of the past producing, Ruby Graphite mine in Montana, USA
- The company recently revealed that they are in talks with prospective North American customers and are beginning the material qualification programs for end use potential offtake clients down the line
A battery’s anode is a crucial component of its design, responsible for receiving incoming electricity and dissipating the heat created in the process of doing so; notably, it is also almost entirely made up of graphite. Today, the world is almost entirely dependent on China for its graphite supply – the nation mines 65% of the world’s graphite, processes 85 percent and is home to the world’s sixth largest anode material producers, according to the International Energy Agency (https://ibn.fm/58toQ). Mozambique is the world’s second largest producer of the mineral, set to account for nearly 14% of global supply by 2030 according to Benchmark Minerals; nevertheless, 96% of Mozambican graphite is mined from the country’s Cabo Delgado province, a geographical territory that has seen a huge rise in insurgent activity since 2017 (https://ibn.fm/5SBqe). With the natural graphite demand set to treble over the next four years as sales of electric vehicles soar, the constrained nature of the western supply chain of the essential mineral is becoming increasingly apparent.
The U.S. predominantly uses synthetic graphite, a material largely produced from the by-products of the fossil fuel industry within its domestic battery manufacturing industry. Paradoxical to its use in powering electric vehicles, aimed towards ultimately reducing greenhouse gas emissions, synthetic graphite is derived from a feedstock consisting of petroleum coke or pitch coke – the latter, a by- product resulting from coal tar with a carbon footprint nearly four times higher than that generated by mining natural graphite.
The U.S. has sought to tackle the growing conundrum posed by the geographical concentration of natural graphite mining through the passing of the recent Inflation Reduction Act (“IRA”). The legislation states that EVs entering the market after 2024 will not be eligible for tax credits – which can go up to $7,500 – if any of the critical minerals are extracted, processed or recycled by a “foreign entity of concern”, which includes China. However, and as a result, graphite prices have soared by nearly 60% since the start of 2022 with the World Bank Group now predicting that a rise in anode demand will likely fuel a material shortage of 8 million tonnes by 2040.
Reflex Advanced Materials (CSE: RFLX) (OTCQB: RFLXF), a British Columbia-based strategic minerals company focused on locating and developing economic properties within the advanced materials space, has centred its corporate mission around catering to the burgeoning need for natural graphite supply through its flagship asset the Ruby Graphite Project. One of a handful of companies comprising the western natural graphite supply chain, Reflex Advanced Material’s flagship project is a past producing graphite mine in southwest Montana which produced upwards of 2,400 tons of graphite between 1902 and 1948, as well as the Ontario-based Zig Zag Lithium Property, encompassing eight mining claims across 2,710 hectares.
As a result, and in a sector characterized by opaque pricing and long-term bilateral off-take agreements between producers and consumers, Reflex Advanced Materials recently revealed that it has begun the qualification process with prospective North American customers, putting the company years ahead of their peers within the lengthy graphite sales cycle. With an upcoming drill program scheduled to kick-off in the summer of 2023 at its Ruby Graphite project in Montana, alongside two product development and material research partnerships currently underway in an effort to help the company diversify its risk profile and improve margins, Reflex Advanced Materials are aiming to emerge as one of the biggest beneficiaries of the global push towards an electric vehicle-powered future.
For more information, visit the company’s website at www.ReflexMaterials.com.
NOTE TO INVESTORS: The latest news and updates relating to RFLXF are available in the company’s newsroom at https://ibn.fm/RFLXF
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